The Federal Government spent ₦7.7tn on debt interest payments between January and June 2026, exceeding its total revenue of ₦6.2tn by ₦1.5tn, according to the World Bank.

The figures were contained in the bank’s October 2026 Nigeria Development Update, titled Beyond the Federal Purse: How Higher Revenues Shaped State Priorities.

The report showed that interest payments rose by 37.5 per cent from ₦5.6tn recorded in the corresponding period of 2025, largely due to high domestic borrowing costs.

“Interest payments increased to 3.1 per cent of GDP (N7.7tn) from 2.5 per cent (N5.6tn) amid high domestic borrowing costs,” the World Bank stated.

Federal revenue, however, increased by 72.2 per cent, rising from ₦3.6tn in the first half of 2025 to ₦6.2tn in the same period of 2026. The growth was attributed to improved oil receipts, stronger corporate tax collections and higher independent revenues.

Despite the increase in revenue, total federal expenditure rose by 10.3 per cent, from ₦14.6tn to ₦16.1tn. Personnel costs also increased from ₦3.7tn to ₦4.2tn, while reported capital expenditure fell to ₦700bn from one per cent of GDP in the first half of 2025 to 0.3 per cent in 2026.

The report indicated that combined interest and personnel costs reached ₦11.9tn, accounting for about 73.9 per cent of total federal expenditure.

Although the fiscal deficit narrowed from ₦11tn in the first half of 2025 to ₦9.9tn in the corresponding period of 2026, the World Bank cautioned that the improvement should be viewed against the low level of reported capital spending.

“The improved early-year fiscal outturn should be interpreted cautiously given the low reported federal capital spending,” the report stated.

On Nigeria’s broader debt position, the bank estimated the country’s debt stock at approximately ₦177tn in 2025, equivalent to 40 per cent of gross domestic product, compared with ₦67tn, or 27.6 per cent of GDP, in 2021. Exchange-rate valuation effects and the recognition of previously accumulated liabilities contributed to the increase.

Domestic debt accounted for 57.9 per cent of the debt stock but generated 72.6 per cent of interest payments in 2025, reflecting the high cost of local borrowing.

The World Bank recommended reducing expensive borrowing, prioritising concessional financing and extending debt maturities to lower refinancing risks. It also called for stronger revenue mobilisation, improved budget planning and greater discipline in public spending.

The institution projected that Nigeria’s consolidated fiscal deficit would rise from 3.1 per cent of GDP in 2025 to 3.5 per cent in 2026, partly due to increasing interest, personnel and pre-election expenditure pressures.